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The central governments of many developing countries have chosen to decentralize their anti-poverty programs, in the expectation that local agents are better informed about local needs. The paper shows that this potential advantage of decentralized eligibility criteria can come at a large cost, to the extent that the induced geographic inequities undermine performance in reaching the income- poor nationally. These issues are studied empirically for (probably) the largest transfer-based poverty program in the world, namely China's Di Bao program, which aims to assure a minimum income through means-tested transfers. Poor municipalities are found to adopt systematically lower eligibility thresholds, reducing the program's ability to reach poor areas, and generating considerable horizontal inequity.

Absolute poverty --- Anti-poverty programs --- Data set --- Developing countries --- Economic Theory and Research --- Income --- Inequality --- Macroeconomics and Economic Growth --- Mean incomes --- Policy ReseaRch --- Poor areas --- Poverty lines --- Poverty Monitoring and Analysis --- Poverty Reduction --- Public Sector Management and Reform --- Redistributive policies --- Services and Transfers to Poor

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The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. The authors argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As their measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. The authors show that for a large set of countries their assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, they observe an interesting pattern of higher levels of overall inequality in countries where their measure finds higher between-group contributions.

Between-Group Inequality --- Differences In Income --- Economic Inequality --- Economic Policy --- Equity and Development --- Group Inequality --- Group Means --- Income --- Income Differences --- Income Distribution --- Income Inequality --- Incomes --- Inequality --- Inequality Aversion --- Inequality Decomposition --- Inequality Measurement --- Mean Differences --- Mean Income --- Mean Incomes --- Measurement Error --- Policy Research --- Population Sub-Groups --- Poverty Impact Evaluation --- Poverty Reduction --- Rural Development --- Rural Poverty Reduction --- Services and Transfers to Poor

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Using social tables, the author makes an estimate of global inequality (inequality among world citizens) in the early 19th century. The analysis shows that the level and composition of global inequality have changed over the past two centuries. The level has increased, reaching a high plateau around the 1950s, and the main determinants of global inequality have become differences in mean country incomes rather than inequalities within nations. The inequality extraction ratio (the percentage of total inequality that was extracted by global elites) has remained surprisingly stable, at around 70 percent of the maximum global Gini, during the past 100 years.

Average income --- Average incomes --- Economic review --- Equity and Development --- Growth rates --- Historical perspective --- Household surveys --- Income --- Income distribution --- Income distribution data --- Income distributions --- Income inequality --- Income levels --- Incomes --- Inequality --- International Economics & Trade --- Mean income --- Mean incomes --- Policy research --- Poverty Impact Evaluation --- Poverty Reduction --- Power parity --- Public policy --- Public Sector Development --- Real growth --- Services and Transfers to Poor --- Trade Policy

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The results of new direct price level comparisons across 148 countries in 2005 have led to large revisions of purchasing power parity exchanges rates, particularly for China and India. The recalculation of international and global inequalities, using the new purchasing power parity rates, shows that inequalities are substantially higher than previously thought. Inequality between global citizens is estimated at 70 Gini points rather than 65 as before. The richest decile receives 57 percent of global income rather than 50 percent.

Average income --- Consumption expenditures --- Country dummies --- Country regressions --- Developed economies --- Developing countries --- Economic Theory and Research --- Emerging Markets --- Empirical studies --- Equity and Development --- Gini coefficient --- Growth rate --- Growth rates --- Household surveys --- Income --- Income levels --- Inequality --- Macroeconomics and Economic Growth --- Mean incomes --- Policy research --- Poverty headcount --- Poverty Impact Evaluation --- Poverty line --- Poverty Reduction --- Power parity --- Private Sector Development --- Real growth

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Inequality in world income is very high, according to household surveys, more because of differences between mean country incomes than because of inequality within countries. World inequality increased between 1988 and 1993, driven by slower growth in rural per capita incomes in populous Asian countries (Bangladesh, China, and India) than in large, rich OECD countries, and by increasing income differences between urban China on the one hand and rural China and rural India on the other; Milanovic derives the distribution of individuals' income or expenditures for two years, 1988 and 1993. His is the first paper to calculate world distribution for individuals based entirely on data from household surveys. The data, from 91 countries, are adjusted for differences in purchasing power parity between the countries. Measured by the Gini index, inequality increased from an already high 63 in 1988 to 66 in 1993. This increase was driven more by rising differences in mean incomes between countries than by rising inequalities within countries. Contributing most to the inequality were rising urban-rural differences in China and the slower growth of rural purchasing-power-adjusted incomes in South Asia than in several large developed market economies. This paper - a product of Poverty and Human Resources, Development Research Group - is part of a larger effort in the group to study inequality and poverty in the world. Also published in The Economic Journal, January 2002 pp. 51-92. The author may be contacted at bmilanovic@worldbank.org.

Consumption --- Economic Theory --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial Literacy --- Growth Models --- Health Systems Development and Reform --- Health, Nutrition and Population --- Household Income --- Household Surveys --- Income --- Income Differences --- Income Distribution --- Income Distribution Data --- Income Inequality --- Increasing Inequality --- Inequality --- Macroeconomics --- Macroeconomics and Economic Growth --- Mean Incomes --- Median Voter --- Median Voter Hypothesis --- Personal Income --- Political Economy --- Poverty Diagnostics --- Poverty Impact Evaluation --- Poverty Reduction --- Power Parity --- Private Sector Development --- Rising Inequality --- Rural Development --- Rural Poverty Reduction --- Services and Transfers to Poor --- Social Protections and Labor